Most of the 17,000 residents of the largely Muslim town on Mindanao island fled to evacuation centers in neighboring towns or to relatives elsewhere after the Maute incursion on Saturday, said Mayor Dimnatang Pansar.

The military also obtained photographs showing the Maute group flying the black IS flag over the old town hall.

Military spokesman Colonel Edgard Arevalo, said this symbolic action was expected from the group.

"They have long been professing allegiance to the foreign terror group. This is still part of the Maute group's agenda in courting support and encouraging similar-minded individuals to support ISIS," he said in a statement.

The Maute group is one of several armed Islamist organisations in Mindanao which have pledged allegiance to ISIS fighters in Iraq and Syria.

Philippine troops fire their 105mm howitzer cannons towards Islamic militant group positions from their base near Butig town in Lanao del Sur province, on the southern island of Mindanao, on Sunday. Richel Umel, AFP

In past clashes with troops, its members were seen carrying black IS flags and bandannas bearing the jihadists' insignia were found in their base, the military said.

Three members of the Maute group were arrested last month, accused of the September bombing that left 15 people dead in Davao, Duterte's home town and Mindanao's largest city.

The Maute group, once described by the military as a small-time extortion gang, attacked a remote army outpost in Butig in February, triggering a week of fighting that the military said left six soldiers and 12 militants dead.

The group also beheaded two employees of a local sawmill in April, the military has said. -- Reports from Chiara Zambrano, ABS-CBN New; Agence France-Presse